x Abu Dhabi, UAESunday 23 July 2017

Perceived advantage for Germans might not be so

By not taxing banker bonuses, Germany may think that it is about to snooker London and Paris. It may want to think again.

There is almost a danger that one might start to feel sorry for Gordon Brown, the British prime minister. His blunders are almost becoming a daily occurrence. He spent years claiming "prudence" as chancellor of the exchequer, during which, among other things, he sold half the UK gold supply, a £2 billion (Dh11.94bn) own goal. His latest action is an apparent attempt to throttle the golden goose that is the City of London. In an unholy alliance with the French president Nicolas Sarkozy, Mr Brown announced his intention to start taxing banker bonuses. London and Paris would work together to treat the upstarts to a lesson and show them once and for all who is boss, so the thought process went. The Germans were expected to follow suit and possibly even the Americans. It did not take long to learn that the Germans were unwilling to fall into line. Josef Ackermann, the chief executive of Deutsche Bank, was soon crowing that this would constitute a huge advantage for Frankfurt as there were no plans for a similar tax in Deutschland. This may not be such good news for the Germans as they might think. London's preeminence is not just based on a flexible tax regime, but also on flexible labour laws. German workers are often not allowed to work late hours or on weekends, which is not much use when there is a huge merger or takeover bid. Given the gigantic amount of support the British government has had to give its feckless bankers, its financial industry might be less of a golden goose and more of a Trojan horse. The Germans should stick to making beautiful motor cars and not meddle in finance. rwright@thenational.ae